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The FTSE 100 is flat in early trading. Companies with trading reports and updates today include Halfords, Serco, Watches of Switzerland Group, The Works, Moonpig, Currys and Quiz. Read the Business Live blog from Wednesday 26 June below.
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Serco UPS Guide
Serco Group has raised its annual profit forecast, driven by contracts and acquisitions of international immigration services.
However, it urged caution about the potential impact of the elections on the markets in which it operates.
The London-listed company has benefited from the acquisition of immigration services companies, even as weakness in Medicare services persists.
Serco, one of the suppliers that had supported the UK government’s test and trace program during the pandemic, expects a full-year adjusted operating profit of £270m, up from its previous forecast of £260m.
However, the company, which provides defence, security, immigration, health and transport services to governments, said it was aware that multiple elections would affect its performance.
The United Kingdom, France and the United States have scheduled national elections in the coming months.
“As we enter the second half of the year, while mindful of the potential international impact of the 2024 elections, we remain optimistic about the quality of our pipeline of potential new jobs to support our medium-term growth objectives,” he said. CEO Mark Irwin. saying.
Halfords suffers ‘perfect storm of low consumer confidence and bad weather’
Derren Nathan Share Research, Hargreaves Lansdown:
‘Halfords, the one-stop shop for motorists and cyclists, has delivered full-year results in line with previously downgraded guidance. The strong growth in services provided by the group’s Autocenters was tempered by a single-digit increase in retail operations.
‘High levels of promotional activity failed to bolster revenues, leading to a material fall in underlying profits.
‘Halfords is sticking to its strategy of expanding the top-performing services division, which benefits from higher levels of recurring revenue. This should serve you well in the future, but the short-term headwinds are still blowing strongly.
‘A perfect storm of low consumer confidence and bad weather has led to a weak market so far this year. Meanwhile, high transport costs and the increase in the national minimum wage are affecting costs. The shares are trading a little below the long-term average, but for now there are no signs of a catalyst for a revaluation.’
MARKET REPORT: Deliveroo acquisition stalls… but another one is on the way
Deliveroo shares have received a boost as they become the latest London-listed company to be targeted for a takeover.
The food delivery group, nicknamed ‘Floperoo’ after its disastrous stock market float in 2021, rose 7 percent in early trading amid reports it has approached rival Doordash, based in San Francisco.
However, discussions, which began last month, ended after a disagreement over price, according to Reuters.
Halfords Cost Warning
Halfords has warned that inflation “remains a major headwind” for the car and bike retailer, citing a 10 per cent rise in the national minimum wage and “significant increases” in shipping rates since the start of the year.
It came as the retailer reported a drop in annual profits on Thursday as traffic at its stores slowed due to tough market conditions and wet weather.
The company posted underlying pre-tax profit from total operations of £36.1m for the year to March 29, up from £44.2m a year earlier and just below analyst forecasts of £36.2 million.
Freight rates have soared to their highest levels outside of the pandemic era, in part due to the disruption of shipping in the Red Sea.
Halfords said it had secured rates “well below market spot rates” but still forecast freight costs to be between £4m and £7m higher than we anticipated at the start of the year.
It said: ‘In this context, we continue to focus on optimizing the platform we have built and controlling what we can. As such, we plan to allocate proportionately fewer resources to the strategic transformation, as set out in more detail at the end of the strategic and operational review.
‘We do not expect these headwinds to persist over the longer term. Consumer price inflation is declining and our core markets are expected to improve over the medium term.
‘We remain confident that the financial targets announced at the April 2023 CMD can be achieved assuming markets eventually recover as forecast, although this will take longer than we anticipated last year.’
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